Grace Plaza of Great Neck, Inc. v. Axelrod, 68 N.Y.2d 1020 (1986)
An administrative agency’s interpretation of a statute it is charged with enforcing is entitled to deference by reviewing courts if the interpretation is not irrational, unreasonable, or inconsistent with the statutory purpose.
Summary
Grace Plaza challenged the Commissioner of Health’s authority to observe patients during hospital inspections. The Court of Appeals held that Public Health Law § 2803 (1) (a) grants the Commissioner the power to observe patients to assess medical care standards. The court reasoned that the Department of Health possesses powers expressly conferred by statute and those required by necessary implication. Because the Commissioner’s interpretation was not irrational or inconsistent with the statute’s purpose, it was entitled to judicial deference, thus allowing observation of patients during inspections.
Facts
The Commissioner of Health interpreted Public Health Law § 2803 (1) (a) as granting authority to observe patients during inspections of hospitals to assess the fitness and adequacy of medical care and hospital service standards. Grace Plaza of Great Neck, Inc. contested this interpretation, arguing that the statute did not explicitly grant such power.
Procedural History
The lower courts upheld the Commissioner’s interpretation. The case reached the New York Court of Appeals, which affirmed the lower court’s decision, thereby validating the Commissioner’s authority to observe patients during hospital inspections.
Issue(s)
Whether the Commissioner of Health’s interpretation of Public Health Law § 2803 (1) (a), allowing observation of patients during hospital inspections, is a permissible exercise of the powers granted to the Commissioner by the statute.
Holding
Yes, because the Commissioner’s interpretation is not irrational, unreasonable, or inconsistent with the statute’s purpose of ensuring adequate medical care and hospital service standards. The statute grants the power to inquire into the operation of hospitals which can be reasonably interpreted to include observing patients.
Court’s Reasoning
The Court of Appeals affirmed the Appellate Division’s order, deferring to the Commissioner’s interpretation of Public Health Law § 2803 (1) (a). The court emphasized that administrative agencies possess both explicitly conferred powers and those powers necessarily implied to fulfill their statutory mandates. Citing Matter of City of New York v State of New York Commn. on Cable Tel., 47 NY2d 89, 92, the court reiterated that agencies are “clothed with those powers expressly conferred by its authorizing statute, as well as those required by necessary implication.”
The court applied the principle of deference to agency interpretations, stating that